DOWN DARLING COVE PTY LTD and COMMISSIONER OF STATE REVENUE
[2015] WASAT 21
•5 MARCH 2015
DOWN DARLING COVE PTY LTD and COMMISSIONER OF STATE REVENUE [2015] WASAT 21
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2015] WASAT 21 | |
| DUTIES ACT 2008 (WA),TAXATION ADMINISTRATION ACT 2003 (WA) | |||
| Case No: | DR:309/2014 | 13 FEBRUARY 2015 | |
| Coram: | JUDGE T SHARP (DEPUTY PRESIDENT) | 5/03/15 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | DOWN DARLING COVE PTY LTD COMMISSIONER OF STATE REVENUE |
Catchwords: | Stamp duty Agreement for sale and purchase Transfer of land Double duty Whether purchasers and transferee are related Unit trust scheme Unit trust |
Legislation: | Duties Act 2008 (WA), s 7(1)(b), s 10, s 11(1), s 11(1)(a), s 11(1)(b), s 15(a), s 29(2)(b)(i), s 29(7)(c), s 42, s 42(2), s 42(4B), s 42(4B)(a)(i), s 43, s 99(1)(b), s 102(4)(a)(i), s 102(5)(a)(i), s 116(1)(a), s 118(1), s 155(3)(a), s 156(6), s 194(2)(ii), s 194(4)(b), s 194(5)(b) Duties Bill 2007 (WA), cl 43 Interpretation Act 1984 (WA), s 19 Stamp Act 1921 (WA), s 74(3c), s 74(3d), s 74(3d)(f), s 74(3g) State Administrative Tribunal Act 2004 (WA), s 17, s 27(1), s 29(1) Taxation Administration Act 2003 (WA), s 34, s 40(1) |
Case References: | CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211 Commissioner of State Revenue v Landrow Properties Pty Ltd (2010) 79 ATR 800 Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No 2) [2014] WASC 55 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257 Re Charles Lloyd Property Group Pty Ltd v Commissioner of State Revenue (2011) 84 ATR 775 Re Grafton v Commissioner of State Revenue (2011) 85 ATR 526 |
Orders | On the application before Deputy President, Judge Sharp on 5 March 2015, it is ordered that:,1. The application is dismissed. |
Summary | Down Darling Cove Pty Ltd sought a review of a decision of the Commissioner of State Revenue to charge what the company considered to be double duty on both a contract by way of an offer and acceptance for the purchase of a property in Darling Downs and also on the subsequent transfer of land in respect of that same property. ,The Commissioner's decision was based essentially on the fact that the purchasers under the contract were a number of named individuals, but the transferee was a corporation acting in the capacity as trustee of a unit trust called the Darling Cove Trust. The Commissioner considered that the purchasers and the transferee were not related to each other within the meaning of the Duties Act 2008 (WA) and assessed both documents as two separate dutiable transactions.,The company accepted that the purchasers were not directly related to the company because they are not the unit holders in the Darling Cove Trust. However, the company argued that the purchasers ultimately were still the beneficial owners of the property concerned through a series of unit trusts. The company submitted that it was unnecessary for the purchasers to be the immediate unit holders of the Darling Cove Trust. Instead, the purchasers had only to be part of the 'unit trust scheme', which is the phrase used in the relevant provision of the Act.,The Tribunal considered the applicant's argument and the provisions of the Act. The Tribunal concluded that the company and the purchasers were not related because the purchasers were not the unit holders of the Down Darling Trust. The Tribunal considered that it was not open to it to interpret the relevant provision of the Act as broadly as the applicant was contending for.,Accordingly, the Tribunal found that duty is chargeable on both the offer and acceptance and the transfer. It upheld the Commissioner's assessment and dismissed the applicant's application. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : DUTIES ACT 2008 (WA)
- TAXATION ADMINISTRATION ACT 2003 (WA)
- Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Stamp duty Agreement for sale and purchase Transfer of land Double duty Whether purchasers and transferee are related Unit trust scheme Unit trust
Legislation:
Duties Act 2008 (WA), s 7(1)(b), s 10, s 11(1), s 11(1)(a), s 11(1)(b), s 15(a), s 29(2)(b)(i), s 29(7)(c), s 42, s 42(2), s 42(4B), s 42(4B)(a)(i), s 43, s 99(1)(b), s 102(4)(a)(i), s 102(5)(a)(i), s 116(1)(a), s 118(1), s 155(3)(a), s 156(6), s 194(2)(ii), s 194(4)(b), s 194(5)(b)
Duties Bill 2007 (WA), cl 43
Interpretation Act 1984 (WA), s 19
Stamp Act 1921 (WA), s 74(3c), s 74(3d), s 74(3d)(f), s 74(3g)
State Administrative Tribunal Act 2004 (WA), s 17, s 27(1), s 29(1)
Taxation Administration Act 2003 (WA), s 34, s 40(1)
Result:
Application dismissed
Summary of Tribunal's decision:
Down Darling Cove Pty Ltd sought a review of a decision of the Commissioner of State Revenue to charge what the company considered to be double duty on both a contract by way of an offer and acceptance for the purchase of a property in Darling Downs and also on the subsequent transfer of land in respect of that same property.
The Commissioner's decision was based essentially on the fact that the purchasers under the contract were a number of named individuals, but the transferee was a corporation acting in the capacity as trustee of a unit trust called the Darling Cove Trust. The Commissioner considered that the purchasers and the transferee were not related to each other within the meaning of the Duties Act 2008 (WA) and assessed both documents as two separate dutiable transactions.
The company accepted that the purchasers were not directly related to the company because they are not the unit holders in the Darling Cove Trust. However, the company argued that the purchasers ultimately were still the beneficial owners of the property concerned through a series of unit trusts. The company submitted that it was unnecessary for the purchasers to be the immediate unit holders of the Darling Cove Trust. Instead, the purchasers had only to be part of the 'unit trust scheme', which is the phrase used in the relevant provision of the Act.
The Tribunal considered the applicant's argument and the provisions of the Act. The Tribunal concluded that the company and the purchasers were not related because the purchasers were not the unit holders of the Down Darling Trust. The Tribunal considered that it was not open to it to interpret the relevant provision of the Act as broadly as the applicant was contending for.
Accordingly, the Tribunal found that duty is chargeable on both the offer and acceptance and the transfer. It upheld the Commissioner's assessment and dismissed the applicant's application.
Category: B
Representation:
Counsel:
Applicant : In Person
Respondent : Ms R Panetta
Solicitors:
Applicant : N/A
Respondent : State Solicitor's Office
Case(s) referred to in decision(s):
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211
Commissioner of State Revenue v Landrow Properties Pty Ltd (2010) 79 ATR 800
Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No 2) [2014] WASC 55
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257
Re Charles Lloyd Property Group Pty Ltd v Commissioner of State Revenue (2011) 84 ATR 775
Re Grafton v Commissioner of State Revenue (2011) 85 ATR 526
Introduction
1 On 8 January 2014, Leisa Wendy Watson, John Watson, Benjamin John Watson and Sophie Elise Watson (Purchasers) all executed a written offer to purchase a property in Darling Downs, Western Australia (Property). The offer was accepted by the vendor of the Property on 15 January 2014.
2 The Purchasers subsequently elected to substitute as the named purchaser of the Property on the transfer of land documents the applicant (Company) as trustee for the Darling Cove Trust.
3 The respondent (Commissioner) assessed duty on both the agreement for purchase and the relevant transfer of land under s 11(1) of the Duties Act 2008 (WA) (Duties Act). The Company objected to the assessment, saying that duty is only chargeable on the agreement for purchase. Under s 42(2) of the Duties Act, the Company argued, duty is not chargeable on the subsequent transfer of land. This is because the purchaser under the agreement and the transferee under the transfer of land are, in the Company's submission, related within the meaning of s 43 of the Duties Act.
4 The Commissioner disallowed the objection and the Company applied to the Tribunal under s 40(1) of the Taxation Administration Act 2003 (WA) (TA Act) seeking review of the Commissioner's decision on the objection.
Materials before the Tribunal
5 The application was filed on 12 September 2014. The Commissioner filed its statement of facts, issues and contentions on 21 January 2015. The Company filed its statement of facts, issues and contentions on 27 January 2015. The Commissioner had previously filed an agreed bundle of documents on 7 October 2014 (Commissioner's Bundle).
Facts
6 The facts of this matter are not in dispute. These are my findings of fact.
The transactions
7 On 8 January 2014, the Purchasers (John Watson and Leisa Watson as to 20%, Benjamin Watson as to 40% and Sophie Watson as to 40%) signed an offer and acceptance form (Offer and Acceptance) in respect of the Property for a purchase price of $995,000. The Offer and Acceptance was signed by Joanne Lee Egitto as vendor on 15 January 2015 (see pages 3 - 5 of the Commissioner's Bundle).
8 On 17 March 2014, a transfer of land form (Transfer) in relation to the Property was executed by Joanne Lee Egitto as transferor. However, the Transfer named the Company as transferee (see pages 7 - 13 of the Commissioner's Bundle).
9 In relation to the Transfer, the Company was acting as trustee for the Darling Cove Trust (see page 15 of the Commissioner's Bundle).
Down Darling Cove Pty Ltd
10 The Company was registered on 21 January 2014 (see page 97 of the Commissioner's Bundle).
11 John Watson and Leisa Watson are the shareholders of the Company (see page 98 of the Commissioner's Bundle).
Darling Cove Trust
12 The Company is the trustee of the Darling Cove Trust (see pages 23, 63 and 85 of the Commissioner's Bundle).
13 The sole unit holder of the Darling Cove Trust is the Company as trustee for the Darling Cove Unit Holders Trust (see page 61 of the Commissioner's Bundle).
Darling Cove Unit Holders Trust
14 The Company is also the trustee of the Darling Cove Unit Holders Trust (see pages 23 and 85 of the Commissioner's Bundle).
15 The unit holders of the Darling Cove Unit Holders Trust are John Watson, Leisa Watson, Benjamin Watson, Sophie Watson and Down Darling Cove Pty Ltd as trustee for the Darling Cove Investments Trust (see pages 21 and 23 of the Commissioner's Bundle).
Darling Cove Investments Trust
16 The Company is also the trustee of the Darling Cove Investments Trust (see page 23 of the Commissioner's Bundle).
17 The unit holders of the Darling Cove Investments Trust are each of the Purchasers and Michael Watson and Sam Watson (see page 21 of the Commissioner's Bundle).
The assessment
18 On 25 February 2014, Currie & Reeves Conveyancing Services lodged for assessment of duty the Offer and Acceptance and the Transfer, together with a Transfer to Substituted Purchaser Application Form and other supporting documents (see pages 1 - 19 of the Commissioner's Bundle).
19 On 18 March 2014, a Duties Assessment Notice was issued in relation to the Offer and Acceptance (see page 75 of the Commissioner's Bundle).
20 Also on 18 March 2014, a Duties Assessment Notice was issued in relation to the Transfer of Land form (see page 77 of the Commissioner's Bundle) along with a Statement of Grounds (see pages 79 - 81 of the Commissioner's Bundle).
21 On 25 May 2014, the Company, through John Watson, objected to the assessment of duty made in relation to the Transfer (see pages 83 85 of the Commissioner's Bundle).
22 On 17 July 2014, the Commissioner disallowed the objection (see pages 87 92 of the Commissioner's Bundle).
23 On 12 September 2014, Mr Watson applied to the State Administrative Tribunal for review of the Commissioner's decision on objection (see pages 101 - 124 of the Commissioner's Bundle).
24 By order of the Tribunal made on 1 October 2014, the Company was substituted as applicant in the proceedings.
The legislation
Taxation Administration Act 2003 (WA)
25 Section 34 of the TA Act allows a taxpayer the right to object to an assessment made by the Commissioner.
26 Section 40(1) of the TA Act then relevantly provides that where a taxpayer is dissatisfied with the Commissioner's decision on an objection, they may apply to the Tribunal for a review of that decision.
State Administrative Tribunal Act 2004 (WA)
27 These proceedings fall within the Tribunal's review jurisdiction in accordance with s 17 of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The review is therefore to be by way of hearing de novo; s 27(1) of the SAT Act.
28 The Tribunal has all the functions and discretions corresponding to those exercisable by the decisionmaker in making the reviewable decision; s 29(1) of the SAT Act.
Duties Act 2008 (WA)
29 The Duties Act imposes transfer duty on dutiable transactions; s 10 of the Duties Act.
30 An agreement for the transfer of dutiable property is a dutiable transaction; s 11(l)(b) of the Duties Act.
31 'Dutiable property' includes land in Western Australia; s 15(a) of the Duties Act.
32 A transfer of dutiable property is also a dutiable transaction; s 1l(1)(a) of the Duties Act.
33 If not for s 42 of the Duties Act, duty would be chargeable on both an agreement for the transfer of dutiable property and the transfer of dutiable property that follows, on the basis that both are dutiable transactions.
34 Section 42 outlines various circumstances where a transfer of dutiable property that follows an agreement for the transfer of dutiable property will not be chargeable with duty.
35 The Commissioner accepts that the criteria specified in s 42(2)(b) and (c) of the Duties Act are satisfied in this case. So, relevantly, s 42(2) of the Duties Act provides:
Duty is not chargeable on the transfer of dutiable property to a transferee under an agreement for the transfer of dutiable property if
(a) when liability for duty on the agreement arises, the transferee and the purchaser of the property under the agreement are related as referred to in section 43; and
(b) […]; and
(c) […].
36 The relevant 'transferee' for the purpose of s 42(2) of the Duties Act is the Company.
37 The 'purchaser[s] of the property under the agreement' for the purpose of s 42(2) of the Duties Act are the Purchasers.
38 The Purchasers are individuals and so, relevantly, s 43 of the Duties Act provides:
Persons related to purchaser for s. 42(2)(a)
(1) For the purposes of section 42(2)(a), the following persons are related to a purchaser who is an individual
(a) the purchaser's spouse or de facto partner;
(b) a parent or remoter lineal ancestor of
(i) the purchaser; or
(ii) the purchaser's spouse or de facto partner;
(c) a child or remoter lineal descendant of
(i) the purchaser; or
(ii) the purchaser's spouse or de facto partner;
(d) a sibling of
(i) the purchaser; or
(ii) the purchaser's spouse or de facto partner;
(e) a spouse or de facto partner of a sibling mentioned in paragraph (d);
(f) a corporation if
(i) the purchaser is the sole shareholder of the corporation; or
(ii) the purchaser is a shareholder of the corporation and is related (within the meaning of this section) to each of the other shareholders;
(g) a trustee of a unit trust scheme in the trustee’s capacity as trustee of the unit trust scheme if
(i) the purchaser is the sole unit holder in the unit trust; or
(ii) the purchaser is a unit holder in the unit trust and is related (within the meaning of this section) to each of the other unit holders.
(3) [not relevant]
(4) However, persons referred to in subsection (1), (2) or (3) are not related for the purpose of section 42(2)(a) if the dutiable property the subject of the transaction is to be held by a person on behalf of another person (the beneficiary)
(a) as the trustee of a discretionary trust; or
(b) as a trustee of a unit trust scheme, other than as referred to in subsection (1)(g); or
(c) as a trustee other than a trustee referred to in paragraph (a) or (b), unless
(i) the purchaser and the transferee are related as referred to in subsection (1)(a), (b), (c), (d) or (e); and
(ii) the purchaser and the beneficiary are related as referred to in subsection (1)(a), (b), (c), (d) or (e).
39 It is not in dispute that duty is chargeable on the Offer and Acceptance. The issue for consideration is whether or not duty is also chargeable on the Transfer.
40 The parties agree that this case concerns the statutory interpretation of s 43 of the Duties Act. The Tribunal must decide, for the purposes of s 42(2)(a) of the Duties Act, whether the Purchasers and the Company are related within the meaning of s 43 of the Duties Act.
The Commissioner's submissions
41 The Offer and Acceptance is an agreement for the transfer of dutiable property. It is therefore a dutiable transaction. The Transfer is a transfer of dutiable property and is also a dutiable transaction.
42 However, if s 42(2) of the Duties Act applies, then duty is not chargeable on the Transfer.
43 As already indicated, the Commissioner accepts that the criteria specified in s 42(2)(b) and (c) are satisfied in this case. That leaves s 42(2)(a).
44 To satisfy the criterion in s 42(2)(a), the Company and the Purchasers need to be 'related as referred to in section 43'. The Commissioner says that they are not so related.
45 Turning to s 43, the Commissioner says that, because the transferee is a corporation, paragraphs (a) to (e) of s 43(1) do not apply. However, the Commissioner says that s 43(1)(f) might apply and, because the transferee is also a trustee, s 43(1)(g) might also apply. Section 43(1)(g) needs to be read with s 43(4)(b).
46 The Commissioner says that in order to establish whether the Company is to be regarded as related to the Purchasers, it is necessary to apply s 43(1)(f), then s 43(4)(b) and then s 43(1)(g) of the Duties Act.
47 The Commissioner considers that s 43(1)(f) is not satisfied. The shareholders of the Company are John Watson and Leisa Watson, who are not all of the Purchasers.
48 Turning to s 43(4)(b), the Company is the trustee of the Darling Cove Trust and unless s 43(1)(g) is satisfied then the Purchasers and the Company are not related.
49 Finally, the Commissioner considers that s 43(1)(g) is not satisfied. That section applies where the transferee is a trustee of a 'unit trust scheme in the trustee's capacity as trustee of the unit trust scheme'. The Commissioner says that the Purchasers are not unit holders in the Darling Cove Trust. The sole unit holder in the Darling Cove Trust is the Company, as trustee of the Darling Cove Unit Holders Trust.
50 The Commissioner therefore concludes that the Company is not related to the Purchasers within the meaning of s 43 of the Duties Act for the purposes of s 42(2)(a) of the Duties Act. The Commissioner considers that duty is chargeable on the Transfer.
The applicant's case
51 The Company's objection to the Commissioner's assessment centres around the meaning of the phrase 'unit trust scheme' in s 43(1)(g) of the Duties Act.
52 The Company argues that the reference to 'unit trust scheme' in s 43(1)(g) includes multiple unit trusts (or a chain of unit trusts) (see page 109 of the Commissioner's Bundle).
53 The Company points out that the phrase 'unit trust scheme' is not defined in the Duties Act, but says that the terms 'unit trust scheme' and 'unit' are statutorily defined in equivalent legislation in other states. The Company says that it is reasonable and appropriate to apply those statutory definitions to the Duties Act.
54 The Company then says that a 'unit' (in a unit trust scheme) can be a right or interest (whether described as a unit or a subunit or otherwise) of a beneficiary under the scheme, or a right to any such right or interest (see page 109 of the Commissioner's Bundle).
55 The Company's conclusion is that s 43(1)(g) is satisfied in this case because the Company is a trustee of a chain of trusts and in effect the unit holders in the Darling Cove Trust are all related family members (see page 109 of the Commissioner's Bundle).
56 It follows, in the Company's submission, that because s 43(1)(g) of the Duties Act is satisfied, duty should not be chargeable on the transfer of the Property pursuant to s 42(2).
57 However, if duty is chargeable on the Transfer, then the Company submits that 'some relief' from duty could be justified on the basis of s 43(l)(f) of the Duties Act being partially satisfied (see page 109 of the Commissioner's Bundle). The Company says that the Company is related to two of the four named purchasers (namely, John Watson and Leisa Watson) because they are the two sole shareholders
58 In the alternative, the Company argues that the Office of State Revenue fact sheet relating to Substituted Transferees (see pages 93 - 96 of the Commissioner's Bundle) supports an exemption being granted in the present case.
59 The Company explains its argument in this way:
In the introduction to the Fact Sheet it states that: 'Section 42 of the Duties Act 2008 ('Duties Act') provides relief in certain circumstances from duty that may otherwise be chargeable on the transfer of property. This may occur either where property is transferred to a person who is related to the purchaser under an agreement for the transfer of dutiable property, or where a purchaser under an agreement takes a transfer of the property as the trustee for a related beneficiary.
I relied on this Fact Sheet in good faith when deciding to proceed with the substitute purchaser arrangement. It appeared clear to me that the trustee (Down Darling Cove Pty Ltd) was taking a transfer of the property for related beneficiaries (John, Leisa, Benjamin, Michael, Samuel and Sophie Watson). Clearly a trust (sub-trust, intervening trust) cannot be a beneficiary and, therefore, the only parties involved are all members of the same family.
Also note that the Fact Sheet states: 'A trustee of a unit trust scheme is related to a purchaser who is an individual if: ... the purchaser is a unit holder in the unit trust scheme and is related (as set out in these qualifying relationships) to each of the other unit holders.'
Given the word 'Scheme' is used in the Department's Fact Sheet implies that the double stamp duty exemption applies where there is a group of trusts, provided that all the beneficiaries are related to the Trustee, (see pages 109-110 of Respondent's Bundle).
The Tribunal's findings
60 I accept, and it is not in dispute, that the requirements of s 42(2)(b) and s 42(2)(c) have been satisfied. I therefore agree with the parties that the outcome of the Company's application turns on whether, under s 42(2)(a), duty is not chargeable on the Transfer. That question requires a consideration of whether the Purchasers and the Company are related within the meaning of s 43 of the Duties Act.
61 The transferee is a corporation and I therefore agree with the Commissioner that paragraphs (a) to (e) of s 43(1) do not apply. I also agree that s 43(1)(f) does not apply because the shareholders of the Company are John Watson and Leisa Watson. The remaining Purchasers, Benjamin Watson and Sophie Watson, are not shareholders of the Company.
62 Thus it remains to be considered whether, in the light of s 43(4)(b), s 43(1)(g) applies. That involves a consideration of whether, relevantly, the Company is a trustee of a 'unit trust scheme' and the Purchasers are:
1) the sole unit holders in 'the unit trust'; or
2) unit holders in 'the unit trust' and are related to each of the other unit holders.
63 It will be recalled that the Company is the transferee under the Transfer in its capacity as trustee of a unit trust named the Darling Cove Trust. The sole unit holder in the Darling Cove Trust is the Company in its capacity as trustee of a unit trust named the Darling Cove Unit Holders Trust.
64 I turn first to consider the applicant's submission that I should:
a) interpret the phrase 'unit trust scheme' where it appears twice in s 43(1)(g) to mean a series or chain of trusts; and
b) find that the Purchasers and the Company are related pursuant to s 43(1)(g) because the Purchasers each hold units in the final unit trust in that series.
Interpretation of s 43(1)(g) general principles to be applied
65 As Buss JA said in Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211 (Abbotts) at [160]:
The modern approach to statutory construction is purposive. The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text must begin by considering the context, in its widest sense. This will include the general purpose and policy of the provision. (Citations omitted)
66 This approach to statutory interpretation in Western Australia is reflected in Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No 2) [2014] WASC 55 where Edelman J said at [14]:
The key integers in the exercise of determining the effect of Parliament's intention in [section x] are statutory text, context and purpose. The starting point, and the end point, is the text. But, although the statutory text is the 'surest guide' to Parliament's intention, the text must be read in the widest sense of context, including the general purpose and policy of the provision.
67 I may also have regard to extrinsic material without necessarily invoking the provisions of s 19 of the Interpretation Act 1984 (WA). As Buss JA has also said in Abbotts at [91]:
At common law (that is, independently of s 19 of the Interpretation Act), this court is permitted, in construing a statutory provision, to have regard to the words used by Parliament in their legal and historical context and, if appropriate, to give them a meaning that will give effect to any purpose of the legislation that can be deduced from that context. The context includes reference to the legislative history of the provision and any relevant reports of law reform bodies which describe the matters requiring legislative reform.
68 Accordingly, the starting point of the statutory construction of s 43 of the Duties Act is consideration of the text itself, in its proper statutory context.
69 The proper statutory context of a provision includes:
a) the relevant Act as a whole;
b) the general purpose, policy and legislative history of the provision; and
c) the mischief which a statute was intended to remedy; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408, endorsed in Abbotts at [91].
70 However, legislative history and extrinsic materials cannot be relied upon to displace the clear meaning of the text; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257 at [39]. Furthermore, taxation statutes, including the Duties Act, are to be interpreted in a technical manner; Re Charles Lloyd Property Group Pty Ltd v Commissioner of State Revenue (2011) 84 ATR 775 at 781; Commissioner of State Revenue v Landrow Properties Pty Ltd (2010) 79 ATR 800 at 816.
Statutory context and the Duties Act as a whole
71 The term 'unit trust scheme' is used frequently throughout the Duties Act.
72 It appears in the phrase 'trustee of a unit trust scheme'; see, for example, s 29(7)(c), s 42(4B)(b), s 99(l)(b), s 155(3)(a), s 156(6), s 194(2)(ii) and s 194(5)(b).
73 In that context, it is difficult to interpret 'unit trust scheme' to be anything other than a single unit trust. I can see no justification for regarding a 'trustee of a unit trust scheme' as a trustee of multiple or chains of unit trusts. In that context, a reference to a trustee is clearly a reference to a trustee of a single trust.
74 The term 'unit trust scheme' also appears in the phrase 'a trust other than a unit trust scheme or a discretionary trust'; see, for example, s 102(4)(a)(i), s 102(5)(a)(i), s 116(l)(a) and s 118(1).
75 In that context, it is clear that the term 'unit trust scheme' again is a reference to a single unit trust, as distinguished from other single trusts such as a discretionary trust. I cannot see how it could in that context be interpreted as meaning a collective of trusts.
76 The term 'unit trust scheme' is used in the context of a 'trust deed'; see, for example, s 7(l)(b).
77 I cannot see how a trust deed can relate to a series or chain of trusts.
78 Further, the term 'unit trust scheme' is often followed by the phrase 'that trust' in the Duties Act; see, for example, s 29(2)(b)(i) and s 194(4)(b). That would suggest to me that a 'unit trust scheme' in that context has to be read as a reference to a single trust.
79 Similarly, I draw the same conclusion where the term 'unit trust scheme' is used with the phrase 'the unit trust' in the Duties Act; see, for example, s 42(4B)(a)(i).
80 Section 43(1)(g) itself refers to a 'trustee of a unit trust scheme if … the purchaser is the sole unit holder in the unit trust' (my emphasis). This suggests to me that no distinction is to be drawn between a unit trust scheme and a unit trust.
81 Accordingly, I conclude that when the Duties Act is read as a whole it is clear that the phrase 'unit trust scheme' in s 43(l)(g) is intended to mean a single unit trust, as opposed to a series or chain of trusts. I see nothing in the context of the Duties Act as a whole to indicate otherwise.
Legislative history
82 The predecessor provision of s 42 of the Duties Act was s 74(3c) of the Stamp Act 1921 (WA) (Stamp Act).
83 The predecessor provision of s 43(1) of the Duties Act was s 74(3d) of the Stamp Act.
84 Section 74(3d) of the Stamp Act provided:
For the purposes of subsection (3c), the following persons are related to a purchaser who is an individual
(a) the purchaser's spouse or de facto partner;
(b) a parent or remoter lineal ancestor of the purchaser or the purchaser's spouse or de facto partner;
(c) a child or remoter lineal descendant of the purchaser or the purchaser's spouse or de facto partner;
(d) a brother or sister of the purchaser or the purchaser's spouse or de facto partner;
(e) a corporation if -
(i) the purchaser is the sole shareholder of the corporation; or
(ii) the purchaser is a shareholder of the corporation and is related (within the meaning of this section) to each of the other shareholders;
(f) a unit trustee in the unit trustee's capacity as trustee of a unit trust if
(i) the purchaser is the sole unit holder in the unit trust; or
(ii) the purchaser is a unit holder in the unit trust and is related (within the meaning of this section) to each of the other unit holders.
(1) For the purposes of subsections (3d), [not relevant], a person cannot be related to a purchaser in relation to the conveyance or transfer to the person of property that the person intends to hold on behalf of another person (the beneficiary)
(a) as the trustee of a discretionary trust (as defined in section 76);
(b) subject to subsection (3d), (f), as a unit trustee; or
(c) as a trustee other than a trustee referred to in paragraph (a) or (b), unless the beneficiary is also related (within the meaning of this section) to the purchaser.
This clause sets out when a purchaser and a transferee are related for the purpose of satisfying the substituted purchaser provision contained within clause 42(2)(a). This clause differs from section 74(3d) of the Stamp Act as it has been extended to include the spouse or de facto partner of a brother or sister of either the purchaser or the purchaser's spouse or de facto partner.
Further, a deficiency in section 74(3g)(c) of the Stamp Act has also been recognised and corrected. Currently, section 74(3g)(c) allows, for example, a husband named in an agreement for sale to substitute his wife as trustee of a bare trust for a child. However, the provisions do not allow for the husband to substitute himself as trustee of a bare trust for a child. These provisions allow a purchaser to substitute himself or herself as bare trustee for a beneficiary provided they are related within the meaning of this clause. (My emphasis)
Subclause (1) specifies the persons who will be taken to be related to a purchaser who is an individual for the purposes of clause 42(2)(a).
The list of relationships includes certain individuals, corporations and trustees of unit trust schemes. Further qualification of these relationships is contained in subclause (4).
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Subclause (4) specifically limits the application of subclauses (1), (2) and (3) to exclude circumstances where the substituted purchaser will not be the legal and beneficial owner of the property.
Paragraphs (a), (b) and (c) ensure that a person is not related under subclauses (1), (2) or (3) if the substituted purchaser is holding the property on behalf of a beneficiary as trustee of a discretionary trust, trustee of a unit trust scheme (other than as referred to in clause 43(l)(g), or trustee of another trust (unless the beneficiary and the trust are related).
87 It therefore appears that there was intended to be only two differences between s 43(1) of the Duties Act and s 74(3d) of the Stamp Act. First, there was to be an addition of a new category of related persons in s 43(l)(e) of the Duties Act and, secondly, an additional qualification in s 43(4)(c) of the Duties Act. Neither is relevant to the present case.
88 In all other respects, I consider that the content and substance of s 43(l)(g) of the Duties Act was intended to be equivalent to its predecessor provision of s 74(3d)(f) of the Stamp Act.
89 It is accordingly unclear to me why the term 'unit trust scheme' has been used in s 43(l)(g) of the Duties Act in place of the former term 'unit trust'. There is no apparent reason for this. It may be, as the Commissioner contends, that it is simply a drafting error.
90 In any event, there is nothing in the legislative history of the provision to suggest that I am wrong in my conclusion that the phrase 'unit trust scheme' in s 43(l)(g) is intended to mean a single unit trust, as opposed to a series or chain of trusts
The clear meaning of the text
91 The phrase 'unit trust scheme' is not defined in the Duties Act, but I can see no reason to take the approach pressed for by the applicant, namely to apply a statutory definition derived from an Act of another jurisdiction, irrespective of the context of that defined term.
92 In the absence of any indication of a contrary intention, the phrase must be given its ordinary meaning.
93 No authority has been provided for the applicant's proposition that a 'unit trust scheme' and a 'unit trust' are different and I consider that they are not different.
94 Quite apart from any other anomaly in other parts of the Duties Act that a contrary interpretation might lead to, if the two phrases do in fact have different meanings as contended for by the applicant, then it leaves in question what or which unit trust is being referred to in s 43(l)(g)(i) and in s 43(l)(g)(ii).
Conclusion
95 I conclude that when s 43(l)(g) of the Duties Act is read in its context, including the context of s 43(l)(g) itself, and, having regard to the legislative history of that section, the phrase 'unit trust scheme' is to be read as 'unit trust', meaning a single trust and not a series or collection of trusts.
Applying this conclusion to this case
96 I do not consider that the Company is related to the Purchasers within the meaning of s 43(l)(g). The Purchasers are not the sole unit holders in the Darling Cove Trust, nor are they unit holders of that trust at all. The sole unit holder in the Darling Cove Trust is the Company. I consider that the Duties Act, as a taxation statute, is to be read technically and I do not believe that it is open to me to under s 43(l)(g) to trace through layers of unit holders to determine who are the beneficial owners of the Property and then in turn determine whether or not they themselves are or are related to the Purchasers for the purpose of s 43(l)(g).
97 I find that duty is chargeable on the Transfer.
Other findings
98 Turning to the applicant's argument that the Office of State Revenue fact sheet relating to Substituted Transferees supported an exemption of duty on the Transfer, in my opinion the applicant has misunderstood the provisions of the fact sheet.
99 The introduction is as follows:
Section 42 of the Duties Act 2008 ('Duties Act') provides relief in certain circumstances from duty that may otherwise be chargeable on the transfer of property. This may occur either where property is transferred to a person who is related to the purchaser under an agreement for the transfer of dutiable property [that is, s 42(2) of the Duties Act], or where a purchaser under an agreement takes a transfer of property as the trustee for a related beneficiary [that is, s 42(4B) of the Duties Act]. (My additional words)
100 In my view, the introduction to the fact sheet refers to two separate situations where relief is to be provided under s 42 of the Duties Act. The first situation relates to s 42(2). The second situation refers to s 42(4B), where a purchaser under an agreement takes a transfer of property as the trustee for a related beneficiary.
101 I believe that the applicant's argument is misconceived because it relates to a different situation than that under review, namely where s 42(4B) applies.
102 The Purchasers in this case were John Watson, Leisa Watson, Benjamin Watson and Sophie Watson. The Transfer was not in favour of those individuals either as a trustee of a unit trust scheme or as a trustee other than a trustee of a discretionary trust or a unit trust scheme. It is the Company which is taking the Transfer as a trustee of a unit trust scheme.
103 I therefore conclude that there is no substance to this aspect of the applicant's argument. If, however, this conclusion is incorrect, there is ample authority for the view that the fact sheet cannot override the provisions of the Duties Act or otherwise act as estoppel against the Commissioner's duty to administer the Duties Act; see, for example, Re Grafton v Commissioner of State Revenue (2011) 85 ATR 526 at 533.
104 Finally, I have considered the applicant's argument that a partial exemption might apply on the basis that s 43(1)(f) of the Duties Act has been partially satisfied.
105 The applicant's argument is that the Company as transferee is related to two of the four named Purchasers, namely John Watson and Leisa Watson, who are the two sole shareholders of the Company.
106 However, s 42 of the Duties Act does not provide any partial relief in circumstances where the 'related party' conditions in s 43 are only partially satisfied. Section 43(1)(f) clearly provides that either the Purchasers must be the sole shareholders of the Company or that the Purchasers must each hold some of the shares in the Company and are related to the other shareholders.
107 Neither test is satisfied in this case. The Purchasers are not the sole shareholders of the Company. Further, not all of the Purchasers hold shares in the Company, only John Watson and Leisa Watson.
108 I therefore do not consider that any partial relief from duty can be given.
Orders
109 1. The application is dismissed.
I certify that this and the preceding [109] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE T SHARP, DEPUTY PRESIDENT
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